On Wednesday, October 6th, 2021 the Futbol Club Barcelona announced that were technically bankrupt earlier this year around the time when the president of the team, Joan Laporta, took control of the Barca. The CEO of Barcelona, Ferran Reverter, painted a dark and devastating picture of the futbol club’s financial standing as he revealed the results of a Deloitte audit that began shortly after Laporta took the reins of this troubled franchise back in March of 2021 after the former president of the club, Josep Bartomeu, and his board of directors resigned last year.
Although Bartomeu’s administration denies accountability for the team’s extremely poor financial standing at the moment, the new executives of Barca have recently come to realize that the bankruptcy was due to the previous management group of this professional Spanish soccer club. According to Reverter their newly assembled front office executives uncovered debts and future liabilities totaling approximately 1.35 billion euros or $1.55 billion.
In order to try and resolve these financial difficulties Barcelona’s new administration team was forced to completely restructure the organization’s debt and radically decrease their payroll to begin the process of becoming financially sound once again. This was the main driving force behind the Futbol Club Barcelona’s inability to sign arguably the best footballer in the world, Lionel Messi, to a new contract. Messi eventually ended up signing with Paris Saint – Germain.
Reverter calmly collected himself and stated, “There have been serious administrative deficiencies. The new board of directors and its new executive structure encountered an economic and financial situation marked by negative equity and in a situation of technical bankruptcy. There was no operating cash flow as the club struggled to pay all the salaries. There was an urgent need for refinancing. There was no financial planning. They signed players without knowing if they could pay for them. There was an inverted pyramid, with veteran players having long contracts and young players having one – year contracts, which makes it difficult when it comes to negotiating. Barcelona has endured many crises before, but it has always been able to overcome them.”
Aside from the mismanagement of the club’s assets, the COVID – 19 pandemic also contributed to the enormous club debt and financial ruins. Due to the fact that Barcelona has serious spending restrictions right now, their product on the field is obviously struggling. Currently Barca is in 9th place in Spanish League as the Futbol Club of Barcelona has only secured 3 wins over the course of their 7 total overall matches. It is 5 points off of the lead with just 1 game in hand. Hopefully Barcelona can improve on the pitch in the future once their finances begin to get back in order. If you are looking to throw down some money on the Futbol Club Barcelona via Bovada or Intertops I would recommend holding off on that momentarily until this franchise gets their house in order.
Sources:
Azzoni, Tales. “Barcelona says audit shows club was technically bankrupt”. Associated Press News. October 6, 2021.